Equity-based crowdfunding sees backers investing a sum of money into the business in return for an equity stake.

Finally, debt-based crowdfunding involves backers investing money in the form of a loan, with this being paid back over time along with interest.

There are advantages and disadvantages with each of these sources of crowdfunding, and picking one of these will depend upon your business model.

When you are innovating technologically, equity crowdfunding would probably provide the best of these options because it usually involves significantly larger sums of money when compared to the other forms of crowdfunding, but it does all depend on your business.

2. Self-Funding:

Self-funding your innovation project can be a costly exercise.

Innovation, particularly when related to financial technology, is often an on-going cost, so if you choose to self-fund your project you should do it with that in mind.

With new regulations like PSD2 and uncertainty over the Brexit negotiations, financial technology needs to be flexible enough to adapt to any changes, which ultimately costs more.

Additionally, if you choose to self-fund your project it may involve waiting for enough revenue to be able to start the work.

In some cases this may mean you miss the boat on your innovation, and in others the market may have changed, meaning you may need further innovation.

However, one significant advantage of self-funding your project is that you retain full control of the business.

3. Bank Loans:

Loans from banks are the conventional way to fund your business expansion and any projects you may want to undertake.

It is also the largest way for small businesses to invest in their development.

According to the British Banking Association’s Mike Conroy, Managing Director for Business Finance, around £6 billion of new lending is approved each quarter.

Whichever option you choose for funding your innovation project it’s important that you look at each of them in depth to understand how they would affect your business, but it’s even more important to work alongside an IT vendor to understand the market and what your innovation will entail.

Getting your product to market and generating revenue as quickly as possible is key to its success, and good funding plays a major part in this.

At Trusek our SaaS platform is providing a powerful fintech solution for businesses across the spectrum, including charities and banks.

If you would like to get in touch with us for more information about how we can help with your banking platform or proposition, whether an established bank, an emerging bank, a community bank, a credit union or even a new concept bank, email hello@trusek.com or call 020 7048 0470

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About Trusek

Trusek can provide the SaaS technology you need as one of the new breed of financial innovators. We can help you accelerate change, transform your operations, launch new products, and deliver a new kind of customer experience.